I am pleased to announce that today I intend to lay before Parliament draft regulations to ensure value for money in relevant occupational pension schemes, which provide money purchase benefits, through improved governance and measures to safeguard savers in qualifying schemes against high and unfair charges. I am also publishing the accompanying Government response to the October consultation on these measures, “Better workplace pensions: putting savers’ interests first”.
We are committed to building a pensions system that people can save into with confidence and that will help ensure financial independence in retirement. Over 5 million people have now been automatically enrolled into workplace pension schemes. By 2018, 8 to 9 million people will be saving for the first time, or saving more towards their pension.
It is vital, therefore, that workplace pension schemes are run in the interests of members, whose savings will not be diminished by excessive charges.
Since these proposals were announced last March, we have been working closely with industry stakeholders, consumer representatives and regulators to develop the detailed regulations. Today’s Command Paper is therefore the culmination of an extensive and rigorous process of analysis and consultation. It provides a response to our recent consultation on the draft regulations to implement our proposed governance and charges measures for qualifying schemes. It also announces the next stage of our work to ensure full disclosure of costs and charges throughout the value chain in workplace pension schemes, as we plan to publish a joint call for evidence with the Financial Conduct Authority in spring 2015.
For relevant workplace personal pension schemes, the Financial Conduct Authority will be introducing corresponding rules to control charges and to establish Independent Governance Committees from April 2015. Their rules, together with our regulations, will ensure that savers are protected regardless of the type of workplace pension they are saving into.
Subject to parliamentary approval, these draft regulations will be a major step towards ensuring a positive outcome for millions of people in retirement.